Real estate: a good investment?

Well it depends on whom you ask….”Is real estate a good investment”?

I have met many people who keep saying that RE is the best way to create wealth

I have met people who took 5 years to push out a tenant who was not paying rent, but refusing to vacate

I have met people whose property has appreciated by 8% over 15 years, but will say “but we lived in it also, so you need to consider that’ – but they will NOT consider the society charges when it comes to IRR calculation. Not even the painting, maintenance costs….

so is RE a good investment? Do your math. See whether it makes sense to buy a RE in any part – at least read on….

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3 Responses to “Real estate: a good investment?”

  1. Real estate – is of many types, Commercial spaces, office spaces, residential spaces, vacation homes ,forest land, agricultural land , industrial land , with amenities / without amenities, in metro in a non metro.. etc. etc.

    I feel in most of your posts real estate/property refer only to homes/second homes in a metro city, and therefore are not a holistic view on real estate.

    i completely agree transaction costs / maintenance costs / security costs are all factors in real estate but clubbing all types of real estate in one basket is not entirely accurate.

  2. ANAND PENDHARKAR on April 12th, 2018 at 12:54 pm

    One point which is not addressed in the discussion on the subject on various fora, is the home loan.
    An investor investing 25 L in eq / mf etc uses 25 L of his own resources. Whereas, a Residential RE investor typically uses 10 L of own and about 15 L (60%) of loan at 8.5% int.
    So , once the EMI have finished (10/ 12/ 15 yrs) the overall returns may not be too different from other investments.
    Another pt. RE investment in Metros/high end property is different from RE investment in class B towns / moderate projects. One could compare them to investment in microcap/smallcap MF Vs Largecap MF.( High risk-return Vs moderate risk-return)

  3. Sir … I got my answer
    thanks 🙂

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